Letter from the Director
Executive Summary
Introduction
Housing Stock
Homeowners
Understanding Los Angeles County’s Low Homeownership Rates
As of 2023, homeownership rates in Los Angeles County are at a 53-year low, with 45% of households owning the home they live in. This section explores homeownership rates over the decades in Los Angeles County, the State of California and the United States and considers some potential explanations for low and declining homeownership rates in our region.
As shown in Figure XX, since 1970, homeownership rates in Los Angeles County have been consistently lower than both the state and national averages. In 2023, the gap in homeownership between Los Angeles County and the state and national average is wider than in over 50 years. 45% of households in Los Angeles County own the home they live in, compared to 56% of California households and 65% nationwide. In both LA County and the City of LA, homeownership rates have declined since 1980, with the steepest decline in the most recent decade. By comparison, across California and the U.S., homeownership rates fell between 2000 and 2020, but have begun to rise again over the last several years.
Median Home Value
The most intuitive explanation for the disparities in homeownership rates between the City of Los Angeles, LA County, California and the United States is the differences in the cost of homeownership (measured here through median home value). In 2023, the median home value in Los Angeles County was $828,700, more than $100,000 higher than the statewide average and nearly 2.5 times greater than the national average. Furthermore, the median home value in the City of Los Angeles was $919,900 in 2023, nearly $100,000 above the countywide average.
Turnover of Existing Supply
In addition to high median home values and a lack of new construction (see supply chapter), another factor driving down homeownership rates is the lack of turnover. Current Los Angeles County homeowners are remaining in their homes for longer periods, leading to fewer opportunities for households to transition from renting to owning via the existing housing supply. In 2023, 44% of Los Angeles County homeowners had been living in their homes for more than 20 years, compared to 33% of homeowners nationally.
Another factor that may contribute to less turnover of existing supply is younger generations moving into homes they inherited from their parents or grandparents. Fewer homeowners in Los Angeles County had a mortgage on their home in 2023 than in 2010, consistent with both statewide and national trends. However, in Los Angeles County and across California, the share of homeowners who don’t have a mortgage is increasingly younger. Between 2010 and 2023, the share of homeowners without a mortgage who are under the age of 44 increased by nearly 40% in Los Angeles County and statewide. Owning a home without a mortgage can mean that young homeowners are purchasing homes with cash or are inheriting and moving into homes that are fully paid off. However, this growing group of young homeowners without a mortgage has significantly lower incomes on average than homeowners of the same age who have mortgages. This income gap suggests that in Los Angeles County and across California, younger generations may be increasingly occupying homes that were purchased and paid off by previous generations rather than selling them.
Homeownership Across Neighborhoods: Legacies of Redlining
Homeownership rates differ widely across the nearly 270 neighborhoods in Los Angeles County. Like many other urban areas across the U.S., the geography of homeownership in Los Angeles was partly shaped by several federal policies in the 1930s and 40s that aimed to make it easier for families to buy homes without large down payments. This section explores homeownership rates across Los Angeles County neighborhoods through the lens of those policies.
In 1934, the government created the Federal Housing Administration (FHA) and the Home Owners Loan Corporation (HOLC), which introduced federally-backed mortgages with low down payments and longer repayment terms, ushering in the modern era of home mortgage lending. Thanks primarily to these policies, between 1940 and 1960, the U.S. experienced the single largest increase in homeownership in the nation’s history, primarily in urban areas (Fetter).
However, not all neighborhoods and demographic groups benefited from the homeownership boom. As a part of its lending guarantee, the HOLC developed a neighborhood rating system from A to D to indicate geographies where they would and would not issue loans. Neighborhoods home to large concentrations of Black families or particularly diverse communities made up of different racial/ethnic groups were given a grade of “D” to indicate “hazardous for investment” (Avila 35). This rating excluded residents living in those neighborhoods from access to homeowner loans and other financial services that were critical to the economic growth seen in many predominantly white communities that received higher ratings. Communities with “D” ratings were colored “red” on the HOLC maps, and the discriminatory practice was coined as “redlining.”
Los Angeles’ Historic South Central corridor, home to a growing Black population fleeing racialized violence in the South, was redlined and excluded from the postwar homeownership boom. HOLC officials also redlined other communities in East Los Angeles, such as Boyle Heights, because they were home to a “melting pot” of racial, ethnic and immigrant groups (Avila 35).
Although the 1968 Fair Housing Act formally outlawed redlining, the legacy of these nearly century-old policies can still be seen in the geography of homeownership in Los Angeles today. Analysis of current homeownership rates over HOLC redlining maps shows that in redlined communities, just 30% of current-day households are homeowners. By comparison, in communities given a grade of “A” by the HOLC (most desirable), 65% of households are homeowners in 2023 (for additional details about this analysis, see Appendix XX). Explore current-day homeownership rates and historic redlining boundaries across Los Angeles neighborhoods in the map below.
